Tesco calls for improved data access for water consumption
EXCLUSIVE: With water regulator Ofwat confirming that a reform of the water retail market will take place on time, Britain's biggest supermarket chain is calling on suppliers to incentivise a new and competitive water market through the "difficult beast" of data management.
Speaking at the edie Corporate Water Management Conference in London yesterday (26 April), Tesco’s energy buyer James Conlin said that a lack of advancement on water data management was hindering the company’s ability to effectively reduce consumption.
“Data is crucial and you can’t manage what you can’t measure,” Conlin said. “We know today how much power we use for every half an hour yesterday. We also know where that power was used and what on.
“But with water, we’d be lucky if we knew how much we used last month for about 60% of our sites. It’s a difficult beast to get a handle on.”
Conlin believes that one of the ‘big six’ energy retailers may need to make an appearance in this market in order to accelerate a more efficient model of data handling and to promote a competitive array of options for customers.
Tesco is in a position where it isn’t necessarily viewed as water intensive, but its claim as one of the “largest and most complex retail estates in Europe” means that there is a need to lower water consumption.
The company currently uses 6.4 million cubic meters of water each year – enough to fill Wembley stadium one and a half times over. But water utility costs are largely dwarfed by power generation, which makes up 72% of Tesco’s utility bill.
The company currently uses AMR installations at 300 of its sites as well as rainwater harvesting at the “environmentally exemplar” facilities. Yet Conlin believes that these conservation projects are being “hindered” by water companies, fixed costs and a lack of competitive options.
“I’m not expecting enormous savings,” Conlin said. “Obviously we wouldn’t say no, but we should have a greater choice of options cost options from suppliers which would generate extra services. We want the lowest unit rate, but we’d also put a value on quality and additional services that can be provided.
“It’s why we want to tender contracts every 12 months to ensure that we get the best deal. We’d only remain if there was a compelling reason to do so. These would class as water companies who want to build long-term sustainable relations to build synergy.”
Tesco’s call comes as the Department for Environment, Food & Rural Affairs (Defra) begins honing a new retail marketing opening consultation – alongside Ofwat and Market Operating Services (MOSL) – to expand retail competition in the water supply sector in regards to account handling and queries and water efficiency advice.
The reform – set to officially happen in April 2017 – is aimed at increasing the eligibility of water service companies in order to create a more diverse market.
Also speaking at yesterday’s event was Ofwat’s director for retail market opening Adam Cooper, who said that the sector’s willingness to embrace change could be influential in introducing more competition.
“This is a sector that still has a lot to learn,” Cooper said. “It is engaged and actually wants to embrace change, but it’s also starting from a position that feels like the 1980s for energy competition.”
Alongside a potential £200m windfall for the UK economy – a figure described by Cooper as the “genie coming out the bottle” that could grow significantly higher – Cooper believes that the biggest change the opening will introduce is that of a cultural shift.
“The opening will make the process much more customer centric,” he added. “At the moment I think there are a number of incumbent water suppliers who view this as compliance rather than an operating shift, but it gives the customers the ability to start driving the conversation.”
The work that Ofwat, Defra and MOSL have put into the consultation was described as a “fantastic effort” by water management solutions company Waterscan – which has worked with the likes of Whitbread and Premier Inn in the past to tackle water consumption.
The company’s managing director Neil Pendle believes that the reform will counteract “regional monopolies” and allow for greater transparency in water conservation.
“It’s very important that the process is transparent,” Pendle said. “It allows us to see how the relationships operate. It all comes down to choice and this will get more retailers into the opening. A single unified market place will help implement a level playing field.
“At the moment, the regional monopolies are a huge area of confusion for customers, but by unifying data sets and standardising metering we can help standardise and drive down costs. It’s going to take time and it’s down to the customers to drive the market.”